Central Banks To Add To Gold Reserves russia is loading up

Lol, your logic is so hilarious. I'm talking about real operational realities, not silly philosophical concepts. Way out of your league.

 

Don't worry, you'll get to defend your insane views in a thread dedicated specifically to your asinine statement.

 

The Macroeconomic Balance Sheet Visualizer is one of the more interesting tools I've ever seen for the interpretation of "Post-Keynesian" economic theory/processes. I'm going to work with it, over and over, until I can feel that I really understand it. I may not agree with everything it proposes, but I am beginning to understand the idea of velocity as a necessary ingredient in any recovery. Indeed, I think (brave words for a neophyte) that this is maybe what is most lacking in the recovery today, for as we know the recession ended four years ago!

I remember back in 1980 when the National Debt was going to go up to one trillion dollars. We started going nuts! We were certain that this would put us on a trajectory to disaster that we could never recovery from! A lot of us bought gold. A lot of us bought silver. A lot of us were quietly amazed when nothing disastrous happened.... I remember that, and I'm lucky that I didn't dive into the madness and lose my ass! But this supports your contention (and Iriemon's) that the National Debt, per se, doesn't control the fate of the economy. Here we are today, with the National Debt pushing toward $17 trillion dollars -- well, if the situation of 1980 was an accurate indicator, then, surely we should be going into an absolute apoplectic hysteria that defies description... but I don't get the sense of anything like that happening. Just trying to be honest.

I think Bernanke and the Fed use a carrot-and-stick method to alternately spur, and then retard growth. As I said earlier, they seem to be most interested in keeping "the course of economic movements within safe bounds." It was a hard -- VERY hard concept for me to grasp, that of the growing National Debt not being caused by the Fed's "money printing/creation-out-of-thin-air". And it has been difficult for me to accept the idea that the very people who caused this awful recession (investment bankers and other corporate paper-pushers) should be lavishly rewarded for causing the problems in the first place, and completely exempted from any punishment.

Thank you again for the Macroeconomic Balance Sheet Visualizer. It not be a panacea for whatever is wrong with my economic understanding, but it is very, very interesting nevertheless....

 

Pollycy, he is filling your head with nonsense. Base money or bank money is just as "real" as the dollars you have in your wallet. It is created when the fed exchanges dollars for securities. At present, they are buying federal debt and more toxic mortgage securities in order to inject money into the economy. Even fed officials admit this! Their balance sheet is exploding and their capital ratio is insanely low. It's a "fraud balloon", like you have always said. Don't listen to the fed apologists because they are full of crap!

 

You are such a liar. The Fed has not admitted they "inject money into the economy". Here's Congress asking Ben Bernanke "are you printing money?". Ben Bernankes response "Not literally".

[video=youtube;bg7tqUrPvYM]http://www.youtube.com/watch?v=bg7tqUrPvYM[/video]

More Ben Bernanke quotes...

"“What the purchases do… is… if you think of the Fed’s balance sheet, when we buy securities, on the asset side of the balance sheet, we get the Treasury securities, or in the previous episode, mortgage-backed securities. On the liability side of the balance sheet, to balance that, we create reserves in the banking system. Now, what these reserves are is essentially deposits that commercial banks hold with the Fed, so sometimes you hear the Fed is printing money, that’s not really happening, the amount of cash in circulation is not changing. What’s happening is that banks are holding more and more reserves with the Fed."


You literally have no clue what you are talking about.

 

I guess you don't consider the banking sector as part of the "economy". More socialist ignorance...

 

You just got to learn to separate what the banks and the Fed does with the real economy. The real economy consists of real humans transacting real goods and services and investments. Physical things.

The Fed, banks, and Treasury simply are nothing more then spreadsheets. They just move money around to control the levers for the real economy. They do not purchase any physical goods and services in these transactions, they are nothing more than accounting transactions to move assets around the different entities to effect interest rates.

If you can separate the two, it starts making sense why we can have $17 trillion of debt but nothing "scary" has happened.

When individual debt matures it is not paid off, there is simply a shift in the spreadsheets on where the debt now resides. And since banks and the Fed have an infinite amount of money, we can handle an infinite amount of debt by simply shifting numbers around on a spreadsheet.

- - - Updated - - -

Yea, the banking sector is part of the economy but it has functions that the non-banking sector doesn't have. You are too brainwashed to understand this stuff. Just wasting peoples time.

 

So the fed is injecting money into the banking sector, which you admit is part of the economy, yet you claim they are not injecting money into the economy. More akphidelt "logic" for us to enjoy...

 

This is too complicated for you to understand. The banking sector is part of the economy but also apart of the federal reserve banking system. It's not some false dichotomy. Just to complex for libertarians.

 

From the Dallas Fed's President:

I guess he's a liar, too.

 

Lol, Fisher. That guy is a loon and is the only member that thinks this stuff and votes against everything the Fed does. Trust me, Ben Bernanke is not lying when he says they are not printing money. You just aren't smart enough to understand what he means.

 

Yes, I'm sure you know better than the president of the Dallas fed about the mechanics of monetary policy; you're the self-appointed expert, after all...

And I never said anything about "printing money". Your penchant for fabrication and misrepresentation is bordering on pathological.

 

Ben Bernanke said it perfectly fine. No need for my opinion. I think the Fed Chairman is a good source! And Fisher is wrong by the way.

 

That's right, just ignore the fact that I never said anything about "printing money" and pretend like you've said something relevant. I'm sure someone will believe you.

 

So then you agree the Fed does not create any money for the economy?

 

There is the possibility that each of us is "right". But the overarching reality is that the world's 50 central banks do choreograph the great economic "Kabuki dance" (as I call it), and have done so for decades -- certainly, since the end of World War II.

I know that it is the usual response of an unlettered commentator on economics (me) to pull references out of the Wiki, but before anymore snorts at me (good morning, dujac!), at least please consider this interesting exposition on "money supply" in the Wiki: http://en.wikipedia.org/wiki/Money_supply .... I believe that it actually does a competent job of explaining some of the major differences in the interpretation of the phrase "money supply", and, it does say that "velocity" is "the ratio between nominal GDP and money supply, changes, an increase in the money supply could have either no effect, an exaggerated effect, or an unpredictable effect on the growth of nominal GDP." Computer technologies are child's play compared to this stuff!

So, what is "money supply" in the United States? Depends on how you look at it... here again from the Wiki, is (for me anyway) and interesting description:

[h=3]United States [edit source | editbeta][/h]

MB, M1 and M2 from 1981 to 2012 – Further Information: http://research.stlouisfed.org/fred2/categories/24​

The Federal Reserve previously published data on three monetary aggregates, but on November 10, 2005 announced that as of March 23, 2006, it would cease publication of M3.[SUP][15][/SUP] Since the Spring of 2006, the Federal Reserve only publishes data on two of these aggregates. The first, M1, is made up of types of money commonly used for payment, basically currency (M0) and checking account balances. The second, M2, includes M1 plus balances that generally are similar to transaction accounts and that, for the most part, can be converted fairly readily to M1 with little or no loss of principal. The M2 measure is thought to be held primarily by households. As mentioned, the third aggregate, M3 is no longer published. Prior to this discontinuation, M3 had included M2 plus certain accounts that are held by entities other than individuals and are issued by banks and thrift institutions to augment M2-type balances in meeting credit demands; it had also included balances in money market mutual funds held by institutional investors. The aggregates have had different roles in monetary policy as their reliability as guides has changed. The following details their principal components:[SUP][25][/SUP]

• M0: The total of all physical currency including coinage. M0 = Federal Reserve Notes + US Notes + Coins. It is not relevant whether the currency is held inside or outside of the private banking system as reserves.
• MB: The total of all physical currency plus Federal Reserve Deposits (special deposits that only banks can have at the Fed). MB = Coins + US Notes + Federal Reserve Notes + Federal Reserve Deposits
• M1: The total amount of M0 (cash/coin) outside of the private banking system plus the amount of demand deposits, travelers checks and other checkable deposits
• M2: M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).
• MZM: 'Money Zero Maturity' is one of the most popular aggregates in use by the Fed because its velocity has historically been the most accurate predictor of inflation. It is M2 – time deposits + money market funds
• M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements.
• M4-: M3 + Commercial Paper
• M4: M4- + T-Bills (or M3 + Commercial Paper + T-Bills)
• L: The broadest measure of liquidity that the Federal Reserve no longer tracks. Pretty much M4 + Bankers' Acceptance
• Money Multiplier: M1 / MB. Currently as of June 14, 2012 it is .85. While a multiplier under one is historically an oddity, this is a reflection of the popularity of M2 over M1 and the massive amount of MB the government has created since 2008.

It should be noted that while the treasury can and does hold cash and a special deposit account at the Fed (fed funds), these assets do not count in any of the aggregates. So in essence taxes paid to the Federal Government (Treasury) is excluded from the money supply. To counter this, the government created the TT&L program in which any receipts above a certain threshold are redeposited in private banks. The idea is that tax receipts won't decrease the amount of reserves in the banking system. The TT&L accounts, while demand deposits, do not count toward M1 or any other aggregate as well.
When the Federal Reserve announced in 2005 that they would cease publishing M3 statistics in March 2006, they explained that M3 did not convey any additional information about economic activity compared to M2, and thus, "has not played a role in the monetary policy process for many years." Therefore, the costs to collect M3 data outweighed the benefits the data provided.[SUP][15][/SUP]Some politicians have spoken out against the Federal Reserve's decision to cease publishing M3 statistics and have urged the U.S. Congress to take steps requiring the Federal Reserve to do so. Congressman Ron Paul (R-TX) claimed that "M3 is the best description of how quickly the Fed is creating new money and credit. Common sense tells us that a government central bank creating new money out of thin air depreciates the value of each dollar in circulation."[SUP][26][/SUP] Modern Monetary Theory disagrees. It holds that money creation in a free-floating fiat currency regime such as the U.S. will not lead to significant inflation unless the economy is approaching full employment and full capacity. Some of the data used to calculate M3 are still collected and published on a regular basis.[SUP][15][/SUP] Current alternate sources of M3 data are available from the private sector.[SUP][27][/SUP]
As of April 2013, the monetary base was $3 trillion[SUP][28][/SUP] and M2, the broadest measure of money supply, was $10.5 trillion.[SUP][29]

Without trying to sound overly-philosophical (because I really don't fully understand this central bank stuff), I could equate the Fed's steering of economic processes like the progress of electrical current through a circuit which is constantly being modified during time. The Fed has the ability to "create money" (create "voltage"). The Fed has the ability to store this created money in banks (like voltage is "stored" in capacitors). To control runaway inflation, the Fed can introduce mechanisms to retard the flow of current (putting resistors in a circuit to increase ohm resistance). Then, when a balance is achieved, the voltage can be released as electrical current without short-circuiting that the device, or burning it up.

Oh, hell, I have to go now. Maybe I'll never understand this stuff after all. Again, I know I've lived through this kind of thing before, and I still think the "Stagflation" mess we were in in the 70's was worse (much worse) than today's difficulties. We survived that without the end of the world, and we'll survive this, too....

[/SUP]

 

What do you think QE 3 is all about.It's the printing of money { $85 Billion per
month } backed by the sale of bonds which ends up in the hands of bankers.
Bankers aren't lending money because there is no way to make money at these
all time low borrowing rates.The stock market is high because it takes more dollars
{ inflation } to buy the same number of shares it did 5 years ago adjusted for rising
CPI indexing.How much stock could you buy 5 years ago compared to today with
say $100.How much groceries could you buy 5 years ago with that $100.

 

that's right, you don't

The Congress shall have Power To:

coin Money, regulate the Value thereof

make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.


Congress is explicitly granted power to regulate currency, and to make any law that is 'necessary and proper' to fulfill any of its enumerated powers. Therefore, if Congress can create a Bureau of Mint to coin and print money, it can also create a Bank that can regulate said currency. This argument has stood the test of time since 1791 when congress created the Bank of the United States. In 1819 the Supreme Court voted 9-0 to uphold the Second Bank of the United States. Critics also refute some claims that only gold and coin are legal tender in the U.S. The Supreme Court Case U.S. v. Rifen, 577 F.2d 1111. C.A.Mo. 1978 clearly tells us that paper money can be legal tender:

The United States Constitution prohibits states from declaring legal tender anything other than gold or silver but does not limit Congress' power to declare what shall be legal tender for all debts. Coinage Act of 1965, §102, 31 USCA §392; USCA Const. Art. 1, §10.

 

What??? Lol

 

I guess you don't know what a "coin" is...

 

Just understand this if anything else. There is a reason why M0 is not included in M2. M0 is base money, it's what the Federal Reserve has increased. And the reason, like I've said the entire time is because that money already exists in M2. The Fed is not creating any "new money", they are simply creating reserves in the banking system. Banks do not lend these reserves, they do not have "more money" to lend because of the Fed's actions. Like I said, all the Fed is doing is targeting interest rates. Just like Ben Bernanke has said.

Just like when Congress asked Ben Bernanke "are you printing money". Ben Bernanke's response "not literally". Why does he say this, because technically reserves are a form of "money", but it's not a form of money that is actually used to purchase goods and services in the real economy. It's simply bank money.

 

Wow, you really are clueless. Those reserves can be lent if they exceed regulatory minimums, which they do: http://research.stlouisfed.org/fred2/series/EXCRESNS

They're called "excess reserves" and they are "new money" which could be lent. The reason they aren't being lent is because the fed is paying banks interest to sit on that money. You are basically making your own version of the banking system up and pretending like it's true, and when your errors are pointed out, you throw around strawmen about "printing money" when no one has even mentioned it. Pollycy would be wise to ignore your nonsense.

 

Lol, banks don't lend reserves. And giving them excess reserves does not give them "new money" to lend. You literally are clueless about the banking system and the economy.

Banks aren't lending because there aren't that many qualified borrowers after the financial collapse. It has nothing to do with the measly IOER that they are being paid. This stuff is way too complex for you. I'd suggest sticking to philosophy.

 

The fed creates the printing of money along with the Treasury.They loan it
out to member banks at the Overnight or fed discount rate.Then banks loan it
out at a higher rate in order to make their money.But since the fed has so lowered
the Prime rate via it's tinkering with { basis pts. 25 being a 1/4 percent. } that money
has gotten SO cheap it doesn't profit a Bank to risk lending it out.People no longer
keep cash in a saving acct. or even fool with CD's.
People are putting their money elsewhere.Their 401K's.Buying stocks.
Buying physical Gold & silver.Purchasing stuff with cash like on those
old rebuilt car shows.

 

Lol, that's not even remotely true. If people were purchasing tons of stuff we wouldn't be in such bad economic shape. The truth is people are saving more than ever. You guys literally just make stuff up as you go.